President Ruto has signed a new law reducing the Value Added Tax (VAT) on fuel by 50 percent for three months, aiming to offer immediate relief to motorists and businesses.

• 50 percent VAT reduction on fuel for 90 days.
• The intervention is led by President Ruto and the Kenyan government.
• This temporary measure allows time to review broader strategies for cushioning Kenyans from fluctuating energy costs.

The Central Bank of Kenya (CBK) forecasts inflation to reach 6.2 percent in July, driven by elevated fuel costs and a prolonged Middle East conflict which is impacting global oil supply chains.

• Inflation is projected to peak at 6.2% in July 2026.
• The CBK is the key organization issuing the forecast.
• This rise in inflation is expected to further erode workers' purchasing power, continuing a trend of negative real wages for five consecutive years.

Prices for cooking gas (LPG) have seen a significant increase in Nairobi, with a 13-kilogramme pack surging by up to Sh390.

• The price of a 13kg cooking gas cylinder has risen from Sh3,140 to around Sh3,530, a 12 percent jump.
• This surge is attributed to global price hikes in propane and butane, driven by supply disruptions from the Middle East conflict impacting key suppliers like Saudi Aramco and Sonatrach.
• The rise in cooking gas prices coincides with recent increases in fuel pump prices, adding to the cost of living pressures for consumers, particularly low-income households.